I have heard of investors re purposing hotels and converting them into Multi Family living. Is there anyone that has done this and what are the major considerations in taking on a project like this?
Hey @Jeffrey S Helms
I do not have experience in hotel conversions. However, I did toss around this idea a good bit back when the pandemic started and hotel occupancy plummeted. I know Brian Murray has done one but good luck getting ahold of him haha
The biggest roadblock I saw was the cost of inserting a kitchen into each unit. Obviously, the easy answer here is to only go after hotels that already have in-suite kitchens or kitchenettes.
Honestly, if you're able to find a failing hotel with full suites, in an area of high affordable housing demands, this is a fantastic strategy. I hope to pursue it further one day!
Are you seriously considering this strategy??
Hey @Brenden Mitchum , To be honest I met a commercial real estate agent from Atlanta Georgia recently and she asked me if I knew of anyone who was interested in considering this strategy or already using this. I actually live in Albemarle NC and we have an older motel undergoing this now. I am following the progress of this project to get an idea of how things are going, what are the major hurdles they are encountering etc. College dorms may be an option for this if the location is right and they needed extra space for the students. The students are not going to need to cook as much as most families so a smaller kitchen would be fine in this case I would think.
As far as seriously considering this strategy, I would think the main thing would be just like any other deal. If the numbers work then why not.
I’ve always loved this idea. One day I would love to get to this. I know locally some hotels that don’t perform. I should consider making an offer and seeing where it gets me.
I think it could work in some areas and potentially in the Atlanta market, North Carolina market as well depending on area. If you are ever interested in looking further into the possibility, let me know.
@Jeffrey S Helms , I really like the idea as well. I would be interested to know what you learn from the local project. The idea may work in the Fayetteville area; I think I will have to do some research.
@Don-Carlos Moniz I will keep following up with how this project goes here in Albemarle. The obstacles they had to deal with were the size of the existing units. Weather to tear out walls to increase the size of the unit or to keep them the size as they currently are but, I'm not totally sure which way they decided to go. This is definetly something i would like to hear more about from other investors.
@Jeffrey S Helms my firm has done a condo to apartment conversion but I have heard of some hotels being converted to multifamily projects. Location is definitely something to think of when you are looking to convert. Good luck!
@William Costello That's an idea, I haven't heard anyone taking on that as a project but it seems a bit more doable than hotels or motels i would assume. Location is always something to consider in real estate and i would think this would need a ton of research before anyone took on a project like converting a hotel or motel. Thanks!
Great info on this thread. Michael Blank released a video about this recently. Good video to watch if you are interested in learning more. HERE
Please keep me updated on the conversion in your town. That strategy would be a home run here in ATL, granted you can acquire for the right price. I was thinking for more along the lines of affordable small units.
However, college dorms would work too since Atlanta has several universities. You could just put kitchenettes in the units or even one kitchen per floor and call it a day.